Tuesday November 10, 2009

Govt may replace B5 biodiesel with B3

This is due to poor response to B5 programme

A REDUCTION in the Government’s B5 programme from 5% biodiesel to 3% may be on the cards, given the poor take-up rate by its initial target group – the diesel-powered government vehicles in the Klang Valley.

B5 is a blend of 5% biodiesel and 95% fossil fuel diesel.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said he would present a paper on the progress of the B5 programme and also present proposals, including the push for the B3 blend (3% biodiesel), to the Cabinet before year-end.

Currently, about 4,000 diesel-engine vehicles belonging to three ministeries were using the B5 fuel, he told reporters after officiating the four-day congress.

StarBiz reported recently that, on average, less than 40 tonnes a month of the B5 fuel had been taken up so far by the Defence Ministry, the Kuala Lumpur City Hall and Selangor’s Public Works Department – much to the dismay of biodiesel producers in the country.

Tan Sri Bernard Dompok (second from left) visiting the expo at PIPOC 2009. With him are (left) Datuk Sabri Ahmad and Datuk Dr Mohd Basri Wahid.

This contradicts the Government’s target that 500,000 tonnes of biodiesel would be needed a year upon the full implementation of the B5 programme next year.

Indonesia is targeting to produce 750,000 kilolitres of biodiesel a year and Thailand is allocating 600,000 tonnes of crude palm oil (CPO) for its biodiesel production.

Meanwhile, Colombia is planning to use 500,000 tonnes of its total production of 900,000 tonnes of CPO in 2010 for biodiesel.

Dompok said the local palm oil industry had made tremendous progress towards attaining the Roundtable on Sustainable Palm Oil (RSPO) certification for its operations.

He said Malaysia had a total of 157,000ha producing over one million tonnes of palm oil certified under the RSPO.

Although those certified are mostly from the estate sector, he said: “Attention will be given to bring on board the smallholders into the RSPO process.” In Malaysia, close to 40% of planted areas are managed by smallholders.

According to Malaysian Palm Oil Board (MPOB) chairman Datuk Sabri Ahmad, the board would embark on RSPO certification for 10 clusters, each comprising 300 to 400 smallholders.

“Adhering to RSPO certification procedures means that smallholders will adhere to MPOB’s good agricultural practices, thus helping to improve their productivity,” he added.

In 2008, there were 139,611 independent smallholders in Malaysia involving 540,194ha of oil palm. However, the average fresh fruit bunches production among smallholders was 14 tonnes per ha per year, which is far below the national average of 20 tonnes.

“This is a far cry when compared with the big boys in the plantation sector hitting between 30 and 40 tonnes per ha per year,” said Sabri.

On the issue of poor take-up rate in premium certified sustainable palm oil (CSPO), MPOB secretary-general Datuk Dr Mohd Basri Wahid said the CSPO should be priced higher at US$30 to US$50 per tonne.

This was given the efforts in terms of high investment, research and time-consuming processes that oil palm planters had to ensure to get certified, he said.

The price of premium CSPO slid to US$8 per tonne early this month from US$50 early this year as European buyers, including RSPO consuming members, failed to make full commitment to purchase the premium fuel.

As at October, only about 15% of the one million tonnes of certified palm oil had been purchased, although demand for green palm oil had risen in the past two months, according to findings in the WWF Palm Oil Scorecard, an initiative by WWF International in support of the RSPO.

PIPOC 2009, themed Balancing Ecologics With Economics, will address mainly the issue of sustainability in the palm oil industry.

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